- Allegion has meaningful exposure to commercial and institutional non-residential markets, and new construction may be weak for a couple of years due to COVID-19 disruptions.
- Retrofits, electromechanical locks and door controls in particular, offer a multiyear offset and incremental revenue opportunity, as electromechanical locks are underpenetrated overall, and particularly in schools and healthcare facilities.
- Allegion has done a good job of simultaneously reinvesting in the business and optimizing margins, driving a strong record of financial performance since splitting from Ingersoll Rand.
- Allegion's positive qualities are well-understood, and it looks as though the shares need some combination of stronger underlying construction activity, electromechanical retrofits, and/or rerating to go much higher.
For further details see:
Allegion - Strong Performance Metrics, But Well-Understood Drivers And Opportunities